MGMT6003 Operations Management: Principles And Methods Essay

Question:

Learning Outcomes
• Identify the critical components of operations management function in differing organisations and clearly demonstrate their relationship to decision making and value chain.
• Evaluate, apply and articulate the principles and quantitative methodologies to assist decision-making in operations process planning, scheduling and inventory management.
• Critically evaluate the role of operations management in the strategic management of organisations and supply chains.

Answer:

Introduction

Healthcare sector within Australia faces a number of challenges from macro-environmental factors as well from healthcare sector specific factors (Helms & Nixon, 2010). Healthcare sector organizations need to deal with these challenges and cope with them, devising suitable strategies. The current scope of analysis concerns the macro-environmental and sector specific factors, which needs to be considered while devising strategies to render services in healthcare industry.

Evaluation of macro-environmental factors can be best conducted by means of PESTLE analysis. PESTLE is an abbreviated form for political, economic, social, technological, legal and environmental factors (Moro Visconti, 2016). For the current scope of analysis, healthcare sector of Australia has been considered only. The healthcare sector within Australia receives tremendous contribution and support from the Federal as well as the State governments. This makes the sector extremely capable to devise strategies for catering to patient care. The following figure depicts the varied PESTLE factors present within Australia, which impacts services within the industry (Visconti, Do? & Gurgun, (2017).

Political Factors: The Federal Government is concerned with its healthcare sector tremendously. Year on year it makes high budgetary allocation on this sector for its growth. However, there are minimum bureaucratic influences on the healthcare sector from Federal or State Government. The Government provides special allotment for Aboriginals within the country to bring up health service standards.

Economic Factors: Australia has a stable economy with positive GDP growth. This allows the Federal government to make adequate budgetary allocation towards its healthcare sector. Investment into healthcare sector from private players also remains high, due to conducive Governmental initiatives such as tax breaks and so on.

Social Factors: Presence of well-trained nurses, doctors and other supporting staffs provides adequate pool of talent for the healthcare industry. There are a number of institutes, which trains staffs and employees for the healthcare sector to make them sector ready. This is a conducive factor for devising strategies for providing services in healthcare sector.

Technological Factors: Australia is technologically advanced. Healthcare services within the country make use of such factors to maintain contact with their patients and professionals online. Adoption of EMR systems also provides a number of added advantages to the sector.

Legal Factors: Prevalence of norms and laws in healthcare makes it essential for providers of healthcare to resort to the same. Stringent laws for employment and patient treatment often deters service strategies of organizations.

Environmental Factors: High environmental standards which needs to be followed within the healthcare sector.

Porter’s Five Forces Analysis

The Porter’s five forces analysis provides a powerful tool for assessment of sector specific influences in healthcare industry (Porter & Heppelmann, 2014). There have been analysed to be five major forces of competition, which impacts services in healthcare industry which includes, bargaining power of buyers (patients), bargaining power of suppliers, threat of new entrant, threat from substitute services and healthcare sector rivalry as analysed below.

Bargaining Power of Buyers/Patients: Prevalence of number of healthcare providers allows choices for patients; hence they can choose (Rothaermel, 2015). However, quality service providers are small in numbers hence the power exerted in medium in nature.

Bargaining Power of Suppliers: Suppliers within healthcare sector have a number of purchasers of their products. This leads to high amounts of threat from their bargaining power. Suppliers of materials and products, needed in the healthcare sector are needed to provide services accordingly in the sector. Suppliers constitute integral part of the service strategy in the healthcare sector. Hence, strategies to deal with them have to be devised.

Threat of New Entrant: There is present threat from new healthcare service providers entering the sector. This makes threat of new entrant high on any service providers in healthcare sector. With rising need of healthcare service providers, new entrants are increasingly growing to cater to services. Such new entrant however possess minimum challenges.

Threat from Substitute Services: There are number of substitute services such as homecare services, elderly services, which act as substitutes to ordinary healthcare service.

Healthcare Sector Rivalry: Rivalry within healthcare sector is absent due to facilitation of services in the sector.

Conclusion

Analysis of relevant PESTLE and Porter’s five factor influences reveals that the healthcare industry faces tremendous number of influences. Therefore, healthcare sector service providers need to devise strategies which allow them to overcome challenges within the sector.

Reference Lists

Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis–where are we now? A review of academic research from the last decade. Journal of strategy and management, 3(3), 215-251.

Moro Visconti, R. (2016). Healthcare public-private partnerships in Italy: Assessing risk sharing and governance issues with PESTLE and SWOT analysis.

Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard business review, 92(11), 64-88.

Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.

Visconti, R. M., Do?, A., & Gurgun, A. P. (2017). Public–Private Partnerships for Sustainable Healthcare in Emerging Economies. In The Emerald Handbook of Public–Private Partnerships in Developing and Emerging Economies: Perspectives on Public Policy, Entrepreneurship and Poverty(pp. 407-437). Emerald Publishing Limited.

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